It was pretty standard during the renaissance and not unheard of through the mid 1800s or so for people to have their skin turned into leather and bound onto books after they died. Usually books they'd authored or contributed to.

Basically any library older than 100 years is going to have a few, especially university libraries where amateur academics donate things constantly. I remember the Cal library had a few too. It's not a big deal.

For a forbidden book, it sure seemed to be everywhere in Lovecraft's stories....so having one at Harvard isn't much of a stretch.

It wasn't forbidden in the timeline of most of the stories, and in the Lovecraft-authored stories it wasn't actually, in itself, particularly magical. It was a sort of instruction manual / textbook that most serious scholars of anthropology had read at one point or another and didn't take particularly seriously (partly because surviving editions were incomplete, partly because it was regarded as a hoax by most).

It was basically a book of background mythology that people would refer to mostly because they were surprised to find that parts of it were actual ancient mythology (or true, if you were unfortunate), kind of like how someone might say something like "holy shiat, the Eddas was right all along" if they stumbled across Loki chained under a snake.

It was only a forbidden magic book in the Evil Dead series and some of the more recent mythos stories (though there were implications that a more complete edition than the common one might be dangerous in the older ones).

Using human skin for leather bindings is actually a fairly common practice. I seen several of them in my time in various libraries around the world. Lots of other things got the same treatment. It was quite common on a number of the more prestigious churches, cathedrals, and castles to have flesh covered doors for instance, especially in England for some reason.